How Much Car Insurance Do I Really Need?

Gone are the days when the overall expense in buying a car was the car itself. Due to the difficulties in paying for damages incurred in automobile accidents, states began passing legislation that required drivers to carry car insurance, and while each state has its own minimum requirements for minimum coverage, it is hard to tell how much insurance you should carry on your vehicle.

Knowing the minimum required coverage in your state is one of the first steps to take in determining how much auto insurance you need. You should look at what those minimum liability limits cover and do not cover to then also begin determining what you want from your coverage. Third, you should take a close look at your budget. Most insurance agents will tell you to only buy as much coverage as you can afford, but that is a true, but still vague statement. The fourth weight in determining how much auto insurance you need is to determine the worth of what you are covering with the insurance.

Finding out how much coverage is required from your state is pretty simple. You can usually go to the Department of Motor Vehicles in your state and ask. You can also go online to the DMV and there will usually be a portion of the site devoted to telling you about minimum insurance coverage. However, if you use an insurance broker, they should know the minimum requirements.

From determining what the minimums are, you should then discover how much those minimums cover. Looking at what is or is not covered by required minimums is important to determining your overall coverage. For instance if you have to purchase bodily injury liability and property damage liability, but nothing else, you need to realize that anything that happens to you, like an injury, will probably not be covered by your policy.

Figuring out what is not covered by the minimums will then help you determine what else you want from your auto insurance coverage. Do you want rental car coverage? Comprehensive physical damage coverage or uninsured motorist coverage? Do you want your coverage to help you pay for your windshield should it be damaged? Injuries? As you start to explore all the different coverage options, it can get overwhelming and may begin to create a paranoia to where you think you need everything. Slow down and prioritize your list.

Once you know what type of insurance coverage you want and need, you can then look at your budget. There are a number of insurance sites out there begging to give you a variety of quotes, and an insurance broker can help you navigate your way through costs and knowing what options are better than others.

Also begin thinking about what you need to protect. You should know what assets you have and how much net worth you are not willing to lose in a lawsuit. It is important to get enough coverage to cover all of your assets and your car itself. If you have few items to protect, then you will need less coverage.

Once you know how much coverage to get, then see how much it would be to take the next step up. Sometimes you can get a lot more coverage for just a little more money a month. However, do not make your budget suffer just to get a little more coverage. Get just enough to make your pocketbook and your mind comfortable.

Getting auto insurance does not have to be difficult or mind wrenching process. If you think through it step-by-step with a realistic view of what you need and what you want, then you can get a policy that will allow you to have some financial stability in the case of an accident.

How Much Car Insurance Do I Really Need?

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